Retired Mobile police officers and firefighters may soon see their first permanent increase to monthly pension payments in more than two decades. A proposed 2.5% cost-of-living adjustment is moving forward as the city closes in on the final stretch of a 30-year effort to erase a shortfall in the Mobile Police and Fire Pension Plan.
Randy Reed, president of the Mobile Fire Retirees Association, said the change has been a long time coming. He represents roughly 350 retired Mobile firefighters and said morale among that group is high heading into a vote on the proposal.
“We’re very happy because it’s been a lot of years,” Reed said. If the increase clears its remaining approvals, retirees would begin receiving it Oct. 1, the start of the city’s 2027 fiscal year.
Reed said the bump, while welcome, will not go far given how much everyday costs have climbed. “Cost of living, cost of insurance, deductibles, medicine, everything’s gone up, and 2.5%, you know, probably for most of them, probably will mean about $600 a year,” he said. “So it doesn’t change things a whole lot. Does help.”
Bryan Lee, who chairs the Mobile Police and Fire Pension Board, said the increase would mark just the third adjustment to retiree benefits in about two decades. Retirees who left the department before 1996 received a 2% cost-of-living adjustment in 2008. Those who retired between October 1996 and 2008 instead got a one-time lump-sum payment of $1 for every month worked, meaning someone with 25 years of service received $300. The last across-the-board increase to monthly benefits came in 2005, when retirees received a 4% bump.
Mobile Chief of Operations James Barber said the timing of the proposed increase is tied directly to the pension system finally climbing out of a deep financial hole. “The retirees have been just outstanding in knowing and understanding that we had to get this unfunded liability out of the way, and then once we were able to do that, we made this proposal to the mayor about doing this cost-of-living adjustment,” Barber said.
According to Barber, the city has been paying down roughly $15 million a year toward the pension plan’s unfunded liability, which ballooned after the system faced serious debt problems and the threat of insolvency in the 1990s. “It started off at around $80 million. It grew to as much as $120-something million, and then we’ve been able to bring it all the way down and got rid of that unfunded portion,” Barber said. The city expects to make its final payment on that debt next March.
Lee said 769 retirees and beneficiaries currently draw payments from the pension plan. The Mobile Police and Fire Pension Board was expected to vote this week on formally requesting the 2.5% increase. If the board signs off, the proposal would then head to the Mobile City Council for final approval before retirees could see the extra money in their checks.